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Monday 20 January 2020

American tax exemption for Pakistani diplomats ends

The decision to take back the special tax exemption cards issued to the Pakistani officials was made on 15 May, after which the affected staffers had to surrender the privilege

Islamabad/Washington, DC: The US has withdrawn its special tax exemption to Pakistani diplomats, over a year after the Trump administration imposed travel restrictions on them, forcing the officials to stay within 40 km of the city they are posted in.

The Diplomatic Tax Exemption programme — usually granted to foreign diplomats and consulars — provides sales and use, occupancy, food, airline, gas, and utility tax exemptions to eligible foreign officials on assignment in the United States.

The facility is enjoyed by the officials’ dependents too.

The decision to take back the special tax exemption cards issued to the Pakistani officials was made on 15 May, after which the affected staffers had to surrender the privilege, The News International reported from Washington.

The number of affected staffers of the Pakistani embassy is a little over 20, the report said.

Tax exemption privileges for foreign diplomats, consular officers and staff members are generally based on two international treaties: The Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations.

Since all such services and privileges are based on the principle of reciprocity, that means no privileges are granted to a foreign official unless the United States Embassy and Consular personnel receive the equivalent privileges in that country.

A State Department spokesperson confirmed to The News that there were pending tax exemption issues related to the US diplomatic mission in Pakistan.

However, the department said that both sides were in talks and hoped to resolve the issue and restore the tax privileges.

Answering a question about the issue, Pakistan’s embassy in Washington claimed that the issue of tax exemption and refunds is a routine topic of discussion between any two countries.

“There are thus ongoing discussions between Pakistan and the US on the status of exemption/refunds on the basis of the principle of reciprocity, which should not be construed as withdrawal of any privileges,” the embassy said.

There was so far no response from Pakistan’s foreign ministry in Islamabad.

Last year, the US placed “reciprocal restrictions” on the movement of Pakistani diplomats in the country from May 1, forcing them to stay within 40 km of the city they are posted in.

The US’ move came after Pakistan imposed restrictions on American diplomats in the country and barred them from visiting the tribal belt and Karachi.

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